MPSC Rate Increase – Important Information


MPSC Rate Increase

 

Property owners here is some information on commenting on the proposed rate increase.

 

  1. You can make online comments until September 30, 2020. Go to https://scc.virginia.gov/casecomments/Submit-Public-Comments
  2. Page down to Case No. PUR-2020-00039
  3. There will be no in person hearing due to the Covid virus. The hearing will be conducted via telephone on October 7, 2020 beginning at 10:00 am. You can make comments via telephone by registering. First you fill out a public witness form https://scc.virginia.gov/pages/Webcasting. The form is then emailed as an attachment to SCCInfo@scc.virginia.gov.   You can register via telephone 804-371-9141 during normal business hours. The SCC will call you in order of registration and you are allowed 5 minutes.
  4. The public witness hearing and the web based hearing will be webcast at https://scc.virginia.gov/pages/Webcasting
  5. Our citizen group of participants has reviewed the documents and has the following suggestions for comments (please do not copy and paste, re-write in your own words)
  1. MPSC is seeking a 21.8% revenue increase. By contrast the nearby Town of Elkton operates a similar system and will only increase their 2020 rate by 1.5% to cover increased costs.
  2. The proposed price increase per gallon to residents is 49% higher than all of Great Eastern rate classes and 41% more than the timeshare units will have to pay. This will result in an annual cost to Massanutten residents of more than $1500. a year or 3% of the after-tax median household income for all of Virginia.
  3. The expansion of the water and sewer systems capacity in recent years was not required by residential consumers but solely to make sure there was adequate water and sewer capacity for Great Eastern’s planned future development. Therefore, residential consumers do not benefit from the expansion and should not share any of the costs of its construction or operating the expanded system beyond that needed to meet their own annual usage. These non-residential costs are in excess of the residential requirements and should not be included in the residential rate class parity calculations.
  4. Only operational costs required to meet residential consumer needs should be included in the residential rate category. This includes sharing the cost of mandatory DEQ improvements calculated as a percentage share based solely on residential annual gallons used/treated and not including any of Great Eastern’s usage requirements.
  5. The definition of Residential “rate parity” should be redefined to include only those costs directly generated by residential consumers. A residential only system would require a very small staff to provide treated water/waste water services and required company overhead cost would likely be much smaller and more reasonable. This application of costs should be the basis for achieving residential “rate parity” with the entirety of the remaining costs, complicated accounting, legal fees and other corporate expenses assigned to the commercial, hospitality and water park categories where these costs are primarily generated.
  6. The residential consumers are assigned 25% of almost $750,000 in corporate overhead costs. Without Great Eastern rate categories very little of these costs would be generated for a small residential only system. It is clear the majority of these costs belong to Great Eastern rate categories.
  7. MPSC and their associated companies are carrying debt at around 6.5% for our system, well above current market rates. Regulated and unregulated utility systems are scrambling to refinance debt at 2.5-3%. All rate classes would benefit from reducing the cost of debt.
  8. The SCC rules appear to punish consumers for conserving water. The SCC allows MPSC to propose rate increases to compensate for the recent decline in residential use and allows them to project future declining usage factors into their proposed rate increase in order to eliminate the risk of impacting corporate profit also guaranteed by the SCC. This means the less residents use the more the SCC will allow each resident to be charged.

 

 

A big thank you to the resident group that has worked so hard on this issue.

 

Liz Walker, MPOA Board President